Making Tax Digital

HMRC has it’s ‘Making Tax Digital’ initiative underway to modernise the tax system. Most businesses, including the self-employed and landlords, will need to use approved software or apps to keep their business records. The days of manual record keeping will be over! Keeping well organised and accurate books also will be more important than ever and business data will have to be reported to HMRC quarterly, in addition to the year-end return. Making tax digital will be introduced in stages. From April 2019, businesses with a turnover above the VAT threshold will have to keep digital records for VAT purposes. From 2020, all businesses are likely to need to keep digital records. Although these changes are being phased in, we recommend that all businesses move to a cloud accounting platform now, so that they can enjoy the benefits and be fully prepared.

There’s good news too

By submitting tax information every three months it will have to become a more regular routine. That means no more cramming it all in at the last minute! Embracing cloud accounting software can also improve the accuracy of your information and allow you to share it with your accountant in real time. There’s far less chance of being surprised by a large tax bill. You’ll find out what your tax liability is every few months so nothing gets out of hand. Knowing where you are also means that you are better able to make decisions about things like when to invest in new equipment.

We’re here to help

We will work with you to make sure you’re up and running on cloud accounting software and ready for Making Tax Digital. We realise that change can seem daunting, especially if it means you have to adopt new technology. Getting online and filing more regular returns could actually benefit your business though, and there should be no more sleepless nights, wondering what your tax bill will be!